The Week Ahead: 5th – 9th June

The British Pound suffered a miserable week in the lead up to the General Election on June 8, falling to the lowest level in over 5 weeks. Investors recoiled as an influential pollster, YouGov, published the results of a wide-ranging survey which suggested that Theresa May’s Conservative Party may fall short of winning a majority in Parliament. Clearly, financial markets believe that anything short of a majority for the Conservatives is negative for Sterling, as the alternatives arguably create more uncertainty in the upcoming Brexit negotiations.

Theresa May’s performance in the aftermath of calling the election has been called “robotic” at best and “shambolic” at worst. Missing the 7-way televised debate last week may emphatically come back to haunt the Prime Minister. Rivals seized the chance to score points, with the Liberal Democrat Leader Tim Farron hitting home with a gem of a quip: “The Prime Minister is not here tonight. She can’t be bothered, so why should you? In fact, Bake Off is on BBC2 next. Why not make yourself a brew? You’re not worth Theresa May’s time. Don’t give her yours.”

In contrast, the much-maligned Jeremy Corbyn has made far fewer missteps and gained support when he decided to make a late decision to attend the aforementioned debate. Indigo FX notes that pollsters often underestimate Conservatives support due to the ‘closet Tory’ effect and may offer a distorted picture. One thing is certain: volatility in Sterling will continue to rise in the lead up to the voting day.

In the U.S., the Dollar has had another interesting week. Donald Trump is continuing to lose friends and aggravate people after his latest high-profile decision to take the United States out of the Paris Climate Accords, triggering a Global outcry. That said, the economy is humming: unemployment fell to a multi-year low of 4.3% amid another solid Non-farm Payrolls report.

Here’s the top-tier economic data likely to move the markets next week: